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Uber Retreats From Southeast Asia With Sale to "Grab"

Accepted submission by takyon at 2018-03-26 08:11:53
Techonomics

Uber has exited the Southeast Asian ride-hailing market [bbc.com] with a sale to Singapore-based Grab [wikipedia.org], which also operates in Malaysia, Indonesia, the Philippines, Vietnam, Thailand, Myanmar, and Cambodia:

Uber is selling its South East Asia ride-share and food delivery businesses to regional rival Grab. The move marks a further retreat from international operations for Uber, after it sold its China business to local rival Didi Chuxing. Both firms describe the deal as a win for their passengers, but analysts warn it could mean higher prices.

Grab is South East Asia's most popular ride-sharing firm with millions of users across eight countries. Under the terms of the deal, Uber will take a 27.5% stake in Singapore-based Grab. Uber's chief executive, Dara Khosrowshahi, will also join Grab's board.

SoftBank is the biggest investor in both companies, and could also engineer an Uber exit from India [bloomberg.com], where it competes with Ola [wikipedia.org]:

[The] real victory unquestionably belongs to Masayoshi Son's SoftBank Group Corp., the single-biggest investor in both companies. As I wrote earlier this month, by engineering a retreat for the U.S. company before any more bloodletting for market share, Son ensures that six-year-old Grab will emerge as an early champion in a winner-takes-all business.

A faster path to profit for Uber could also boost its valuation ahead of a planned IPO next year. But at what cost? Having already surrendered China to Didi Chuxing, beating a retreat from Southeast Asia is a precursor to perhaps losing India [indiatimes.com], the lone remaining jewel in Uber's once-flourishing Asian empire.

In India, once again, SoftBank is the largest investor in Uber's main rival, Ola. Competition between the two apps has become ridiculous. For all the PR gobbledygook on how happy Uber and Ola drivers are, the reality is that many who took out bank loans to acquire new cars are hurting badly. There's a glut of ride-hailing cars; wages have collapsed. Banks are collecting on "DUD," -- my moniker for "distressed Uber debt" -- by repossessing vehicles.

Uber's new CEO, Dara Khosrowshahi, says there will be no more exits from global markets [techcrunch.com] (in addition to China, Uber also left Russia [soylentnews.org]). But SoftBank may continue to pursue a strategy of exiting emerging and less profitable markets in exchange for large stakes in competitors.

Related: SoftBank's $80-100 Billion "Vision Fund" Takes Shape [soylentnews.org]
SoftBank to Invest Billions in Uber [soylentnews.org]
SoftBank Devalues Uber by 30% With Latest Offer [soylentnews.org]
SoftBank Acquires 20% of Uber While Massively Devaluing It [soylentnews.org]


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